New Scheme Preys on Desperate Homeowners

New Scheme Preys on Desperate Homeowners  

With the housing market in decline, financial predators are finding yet another way to take advantage of people who fall behind on their payments.

The schemes take various forms and often involve promises to distressed homeowners of cash upfront, free monthly rent and a chance to retain their houses in the long run. But in the process, someone else takes over the deed, borrows as much as possible against the value of the house and pockets the cash. And, almost always, the homeowners still end up losing their homes.

There are no nationwide numbers on this common fraud, known as equity stripping, but it has turned up in almost every state. Seven states have passed laws to try to stop it. Still, with foreclosure rates rising rapidly, it will be a growing problem according to consumer advocates.

Victims are becoming more plentiful as homeowners fall behind on payments and find that they cannot refinance, with mortgage rates rising.  When a property enters foreclosure, it appears on a list at the county clerk’s office. Individuals and companies in equity-stripping schemes monitor the lists closely, contacting troubled homeowners either by phone, by mail or by knocking on their doors.

Don't become the next victim of these schemes.  Remember, if you've received an offer to help with your debt and not lose your home to foreclosure, check out the company making the offer.  Make sure they are legitimate.  Those who are will be glad to furnish you with references.  Those who won't… RUN!

Have you been the victim of such schemes, or know someone who has?  We'd love to hear your comment by clicking the comment link below.